by: Rebecca B. Walzak, president and CEO of Walzak Risk Analysis

Concerned that increasing mortgage defaults will harm securities backed by those loans, investors have been increasingly demanding that lenders repurchase massive amounts of loans with early payment defaults, loans that were at least 90 days delinquent during the first year of performance. Subprime lenders unable to afford those buybacks have closed shop in droves, undertaken massive layoffs, and headed to the auction block. Media outlets, from trade publications to newspapers and national business magazines, are filled with stories of the so-called "subprime meltdown," with some even predicting a carnage that will drag the entire economy into recession.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.